After what the government said was an 18-month investigation, Canada’s Competition Bureau has reached consent agreements with four multinational publishers regarding their e-book pricing policies. The agreements resolve the Bureau’s concerns that the four companies—Hachette Book Group Canada, Simon & Schuster Canada, HarperCollins Canada and Macmillan Canada—“engaged in conduct that resulted in reduced competition for e-books in Canada.” As part of the agreement, none of the publishers admitted any wrongdoing.
In the broad outlines, the settlements are similar to those reached by publishers with the U.S. Department of Justice. The companies agreed to amend any clauses in their distribution agreements with e-book retailers that would “restrict, limit or impede an e-book retailer’s ability to set, alter or reduce the retail price of any e-book for sale to consumers in Canada.” That provision of the settlements will take effect 40 days after the agreements are approved and will last for 18 months.
A second provision prohibits publishers from including a “Most Favored Nation” clause (MFN) for 4-and-a-half years. MFNs were also banned in the U.S. publisher settlements, as U.S. attorneys argued the MFN was "the glue" that held together a conspiracy to eliminate price competition.
The Competition Bureau said in a statement that it believes the consent agreements will lower the price of e-books in Canada, saying that it’s monitoring of the agreements in the U.S. shows that e-book prices fell by about 20% on bestselling titles.
When asked why Penguin Random House Canada was not included in the agreement, a government spokesperson said, "I am unable to comment because the investigation is ongoing." In the U.S., Penguin settled with the DoJ and following completion of the Penguin-Random merger Penguin Random House became bound by the terms.
Spokespersons for the parent companies of the Canadian publishers had no comment.